Elements of Organizing

1
Elements of Organizing

• BAM II
• Mr. Yates

2
Departmentalization

• Functional Departmentalization
• The structure is organized by activities and
  functions
• (example marketing, HR, Operations)
• Product Departmentalization
• Each major product line is administered through a
  separate division
• (example Ford Motor Company - Jaguar Division,
  Lincoln-Mercury)

3
Functional Departmentalization
CEO
VP Production
VP HR
VP Finance
VP Marketing
VP Research
Research Labs
Employment
Cash Planning
Sales
Production
Develop Labs
Compensation
Cost Accounting
Marketing
Quality Control
4
Functional Dept. Advantages

• Maximizes functions within units
• Efficient use of resources
• Simplifies communication
• Easier to measure outputs
• Simplifies training
• Ease of reporting and status
• Preserves strategic control at the top

5
Functional Dept. Disadvantages

• Coordination between departments becomes
  difficult
• Priorities become that of the department only
• Interdepartmental rivalry
• Client satisfaction may be low (not my
  job/department)

6
Product Departmentalization
CEO
EVP Life Insurance
EVP Casualty Insurance
EVP AutoInsurance
EVP Health Insurance
EVP Military Division
Under- writing
Under- writing
Under- writing
Under- writing
Under- writing
Claims
Claims
Claims
Claims
Claims
Marketing
Marketing
Marketing
Marketing
Marketing
7
Advantages of Product Deptart.

• Departments become autonomous profit centers
• Accommodates growth
• Flexibility
• Focuses on the client
• Develops broad-trained managers
• Rapid changes

8
Disadvantages of Product Dept.

• Duplication of services and functions
• Decreased communication between functions
• Coordination problems between specialized product
  areas

9
2 More Types!

• Territorial Departmentalization
• Also called geographic or regional
• Boundaries are determined by legal, political,
  cultural, or geographic considerations
• Customer Departmentalization
• Broken down by customer types and needs
• (Example Retail Sales, Government Sales,
  Industrial Sales

10
Advantages of Territorial

• Reduced transportation costs
• Specialization
• Regional resources
• Legal, political, cultural environments

11
Customer Departmentalization
CEO
Gov. Sales
Light Industrial
Industrial Sales
Retail Sales
Internal Sales
Production Ops/Mgmt
Production Ops/Mgmt
Production Ops/Mgmt
Production Ops/Mgmt
Production Ops/Mgmt
Finance Accounting
Finance Accounting
Finance Accounting
Finance Accounting
Finance Accounting
Marketing
Marketing
Marketing
Marketing
Marketing
12
Advantages of Customer Dept.

• Responsive to customer needs
• Performance tied to requirements of key market
  segments
• Focus

13
Disadvantages of Customer Dept.

• Establishment of company-wide practices difficult
• Special treatment of various buyers
• Customer groups develop at uneven paces

14
Mixed Departmentalization
General Motors
Buick Oldsmobile Cadillac
Chevrolet Pontiac GM Canada
Truck And Bus
Product Divisions
Finance
Distribution
Production Ops/Mgmt
Functional Departmentalization
Western Region
Southern Region
Northern Region
Eastern Region
Territorial Departmentalization